Many of our bankruptcy clients come to us with completely out of control credit card debt – but that doesn’t mean they’ve been completely irresponsible. Thanks to higher interest rates and compounding interest, just a few missed payments can put you past a point where it’s nearly impossible to catch up.
Learning to manage credit card debt is a huge step in avoiding bankruptcy. If you follow these 5 simple tips, you’ll keep your credit cards under control and avoid spiraling credit card debt.
1. Set a budget and stick to it.
Credit cards make it far too easy to spend money you don’t have. If you know what you can spend each month, it will be easier to avoid those spur of the moment purchases that you can’t really afford.
2. Don’t carry a balance for more than 6 months
Compounding simple interest adds up quickly, and after about 6 months, you’ll end up with a much higher balance that’s hard to pay off. Think of your credit card interest as a small pebble that causes a huge avalanche… it starts off small, but quickly becomes a huge force.